This commentary is by state Reps. Katherine Sims, D-Craftsbury, and Emilie Kornheiser, D-Brattleboro.
A growing number of families in the United States rely on child care in order to work and make ends meet throughout their children’s first five years. Businesses and organizations rely on those parents to show up for work. And all of us rely on those businesses and organizations to get our basic needs met.
As access to child care becomes more of a public good than a luxury, it’s the government’s job to ensure equitable access for the sake of us all.
In Vermont, an estimated 8,752 children under 5 who are likely to need care do not have access to child care programs. If families can find child care, high-quality programs are too expensive for many, and a serious financial strain for most.
When families can’t afford child care, a parent (usually a woman) drops out of the workforce, which means they lose wages and they lose experience, setting them back when they do return to work.
Despite high demand and lengthy waitlists, centers are closing their doors due to the harsh realities of running a business in a highly regulated but underfunded industry: Child care workers are among the most underpaid workers in the country, so staff turnover is high and centers are operating beyond capacity.
Families are desperate. If they can’t find child care, they’ll have to live somewhere else.
Businesses also suffer when workers can’t find or afford child care. Their employees call out more often or quit entirely. And when businesses struggle to serve their communities, those communities suffer.
None of us should have to keep paying the price for a broken system. Vermonters already know all of this. An overwhelming 78% of residents say they favor the state increasing funding to ensure there are enough high-quality, affordable child care programs for children under age 5.
We’ve made strides in recent years toward a more equitable system that benefits all Vermont residents. Bill H.217 continues the work we started when the Vermont Legislature passed Act 45 in 2021 and builds on the 2023 Rand Report. It accomplishes what families, child care programs, and employers have been calling on lawmakers to create for years: a long-term, sustainable revenue source that can fund an accessible and affordable child care system.
Here’s what this bill will do:
—Make child care affordable. The bill broadens public funding, making child care more affordable. It sets us on a path to work toward our goal: That no family spends more than 10% of its income on child care and Vermont’s most disadvantaged families will continue to be eligible for no-cost child care.
— Invest in high-quality child care programs. Child care providers will receive more funding to cover the true cost of quality early childhood care and education — including a developmentally appropriate curriculum, small class sizes, and culturally and linguistically responsive environments that are inclusive of children with special needs.
— Invest in the child care workforce. The bill ensures that child care workers are compensated more fairly by increasing pay to providers. Child care programs will also have more funding to provide benefits to this essential workforce.
— This systemic child care investment will provide a huge boost to our economy by enabling more Vermonters to work and moving more Vermonters out of poverty. With continued investment, we could see as much as $375 million added to the state economy.
— It would also save Vermonters millions. Families are currently paying $99.1 million for child care. The measures in H.217 will save the median family with two young children more than $22,000 per year on child care expenses, helping to rebuild the middle class. It will support thousands of child care workers and empower roughly 2,300 parents, primarily mothers, to reenter the labor force.
It will reduce absenteeism and staff shortages for businesses. It will expand current programs and launch new child care centers, allowing all children, no matter their circumstances, a strong start in life.
With the expansion of the Child Care Financial Assistance Program in the bill, approximately 7,450 additional children will qualify for subsidized child care. This increase would more than double the number of children covered by subsidies, making child care more affordable for many more families.
These programs will cost approximately $125 million annually by FY25. The FY 2024 budget appropriated $76 million to kick-start the multiyear system transformation.
Recognizing that employers and workers would benefit most from the system’s expansion and improvement, the bill will institute a new payroll tax, beginning July 1, 2024, called the Child Care Contribution. The contribution rate will be 0.44%, with employers paying 0.33% and employees pay 0.11%. For an employee earning $50,000, the employee would pay $55 and the employer would pay $165 for the year.
The payroll tax is estimated to generate $92 million and, along with ongoing base funding, the revenue should fully cover the child care expansion envisioned in this bill.
Gov. Scott would rather we continue to make small changes around the edges of our child care program. But Vermonters cannot afford to keep living with Band-Aids on a broken system.
This bill will stabilize the child care system by expanding eligibility for subsidies and increasing funding for providers, resulting in more stability for families and businesses across the state. We’re investing now because when we invest in child care, we invest in all Vermonters.